Oil price fall deepens on over-supply fear

BRINKLOW, UNITED STATES: TO GO WITH AFP STORY - US-SOCIETY-ENERGY-ENVIRONMENT-CAR Used cooking oil from a holding barrel behind an Ashton, Maryland, restaurant is seen 20 July, 2006. The oil is to be turned into biodiesel fuel for automobiles and buses. According to the National Biodiesel Board, production of the fuel has increaed three-fold since 2004 to reach 75 million (284 million liters) this year. By comparison, the consumption of diesel produced from oil represents 60 billion gallons (227 billion liters) in the US market. AFP PHOTO/TIM SLOAN =MORE PHOTOS IN IMAGE FORUM= (Photo credit should read TIM SLOAN/AFP/Getty Images)

Oil prices have extended declines amid deepening worries about how long it will take to cut back a global glut in supply.

Brent crude slipped below $47 a barrel in early trading on Friday to reach new five-month lows, having fallen from above $50 the day before.

The oil slump comes just days after BP and Royal Dutch Shell posted sharply improved profits following a recovery in the market in recent months.

Signs of the market weakening again threatens to puncture renewed optimism in the sector – which has been shedding thousands of jobs after the collapse in the price from levels of more than $100 in 2014.

But it could cheer motorists, already benefiting after supermarkets cut petrol and diesel pump prices earlier this week.

Thursday’s fall in the price of Brent crude followed weak Chinese economic data – which might threaten demand from the fast-growing economy – and higher-than-expected US inventories, or stock piles of oil.

Markets had anticipated a faster decline in the glut of supply which had built up.

The weakness in the oil price worsened on reports that oil nations had appeared to rule out deeper cuts to production.

Brent crude was last lower at the end of November.

Oil had slumped to less than $30 a barrel earlier in 2016 but an agreement by the OPEC cartel and other countries had helped boost its recovery from those lows.